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Whether or Not to File Your Own Taxes

Once again, tax season is fast approaching. This means that you have a decision to make: whether to file your own taxes or have local tax preparers do it for you.

There is not one right answer for everyone. This guide will help you decide which option is best for you.

Using Accountants or Tax Preparers

Employing the services of an accountant or a tax preparer comes with many benefits. This includes:

Having it done right

Getting as many deductions as possible

Deducting the tax preparation fee

If your tax return is simple and you are not itemizing deductions, hiring someone to do your taxes may be unnecessary. But if your return has any complexity whatsoever or if you have income derived from self-employment, hiring a competent and experienced professional will bring you peace of mind. The last thing you want to do is make a mistake, which could lead to interest fees and penalties. It could even lead to an audit.

Keep in mind that, even if you do hire someone to prepare your taxes, you are still ultimately responsible. You should carefully review the return before it is filed, and if they are filing it for you, you should ask for confirmation that it was actually filed.

Another good reason for hiring an accountant or tax preparer is if you are itemizing, as a skilled professional will know all the deductions you are allowed. They could find deductions you never even knew existed. Sure, you could research all these deductions yourself. But you should ask yourself if it is really worth your time. What’s more, there is always the possibility that you might miss a deduction, which in itself could have paid for the tax preparation.

Finally, if you are itemizing and your miscellaneous expenses reach a certain threshold, you will be able to deduct the cost of the tax preparation. This does not make tax preparation free, but it can lower the burden considerably.

Preparing Your Own Taxes

Preparing to file taxes yourself can be a good choice if you have a simple return. If you are not itemizing and only have to report W-2 income and perhaps some small investment income, you can save money by filing your own taxes. You can also use software such as TurboTax to help you. Though keep in mind that this software often comes with a cost as well.

If you are someone who is worried about identity theft and you don’t have an accountant or tax preparer you can trust, preparing your own taxes may ease your fears a bit. This is because only you will have access to your sensitive financial information.

Finally, if you have some knowledge of accounting and tax laws and you are the type of person who likes to do things on your own, filing your own taxes may be the more comfortable option. Accountants and tax preparers are only human and are capable of making mistakes just like anyone else. If you make the mistake, at least you won’t have anyone to blame but yourself.

In conclusion, while there are a few benefits to filing your own taxes — especially if your return is simple — most people will benefit more from having an experienced professional complete their tax return.